Mission Land Co. v. BFS Diversified Products LLC

126 F. App'x 741
CourtCourt of Appeals for the Seventh Circuit
DecidedFebruary 11, 2005
DocketNo. 03-3824
StatusPublished
Cited by1 cases

This text of 126 F. App'x 741 (Mission Land Co. v. BFS Diversified Products LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mission Land Co. v. BFS Diversified Products LLC, 126 F. App'x 741 (7th Cir. 2005).

Opinion

ORDER

When a severe thunderstorm struck Northern Indiana on June 27, 1995, it left considerable damage in its wake, including harm to the roof of a warehouse that was leased to General Electric Company. The resulting water leaks damaged most of the inventory that GE had stored in the warehouse. Along with Mission Land Company, which had designed and built the warehouse some seven years prior to the storm, GE sued the general contractor, McShane Construction Company; the roof contractor, Northern Illinois Roofing, Inc. (“NIR”); the design and architectural firm, Friedman, Dobrin & Associated, Ltd.; and Firestone Building Products Company, which after various corporate restructurings is now a division of BFS Diversified Products LLC, and which had supplied and warranted some of the roof components. On this appeal, we are concerned only with Firestone’s alleged liability. The district court found that Firestone owed no duty to the plaintiffs, and that even if it did have some duty, its liability was extinguished by the accepted work doctrine then recognized in Indiana. For those reasons, the court granted summary judgment in favor of Firestone. After the claims against the other parties were resolved, GE and Mission Land appealed to this court. We affirm.

I

In 1987, Mission Land and GE entered into a contract for the construction and design of a warehouse facility in Munster, Indiana. Mission Land’s task was to design and construct the warehouse and then to lease it to GE. Construction began, and in 1988, Mission Land engaged NIR to construct the roof. NIR agreed to install a Firestone RubberGard Ballasted Roof System, which it purchased from Firestone. The parties decided to use a “single-ply ballasted roof,” which is one in which a waterproof material such as the rubber membrane used here is laid over insulation and deck material; the membrane is held in place using some kind of ballast. NIR chose to use river rocks layered over the rubber membrane manufactured by Firestone. As part of the deal, Firestone agreed to provide a limited warranty on the roof against leaks, if the roof was installed in accordance with Firestone’s specifications and in accordance with the drawings drafted by the architect. Before the warranty could enter into force, Firestone had to inspect the roof. It did so in 1989. After the inspection, Firestone recommended that certain repairs be made; those repairs were apparently completed, and Firestone and NIR then signed off on the warranty.

In 1995, six years or so after GE took possession of the warehouse, the thunderstorm hit. It blew away the ballast and tore the rubber membrane; the resulting leaks damaged the GE appliances stored in the warehouse. Mission Land, a California corporation with its principal place of business in California, and GE, a New [743]*743York corporation with its principal place of business in Connecticut, filed suit under the diversity jurisdiction against Firestone and the other defendants noted above. At the time, Firestone was a division of Bridgestone/Firestone, Inc., which was incorporated in Ohio with its principal place of business in Tennessee; it is now a division of BFS Diversified Products LLC, a Delaware corporation with its principal place of business in Indiana. The complaint asserted various claims based on negligence and other theories.

Firestone filed a motion for summary judgment on all counts, which the district court granted. It found that GE and Mission Land could not show that Firestone owed them any duty, and that, even if they could, any duty would be extinguished by the accepted work doctrine, which immunizes a contractor from liability once his work has been accepted by the owner or tenant. On appeal, Mission Land and GE contend that the accepted work doctrine either does not apply or, if it does, that the question whether Mission Land accepted Firestone’s work is disputed on this record.

This court reviews the district court’s decision to grant summary judgment de novo. Ochana v. Flores, 347 F.3d 266, 269 (7th Cir.2003). We take the factual record in the light most favorable to GE and Mission Land, the parties opposing the motion. Id. Nevertheless, we may affirm on any basis that appears in the record. Sherrod v. Lingle, 223 F.3d 605, 614 (7th Cir.2000). That fact is particularly important here, because since the time when the district court made its summary judgment ruling, the Indiana Supreme Court has abandoned the accepted work doctrine in favor of traditional principles of negligence. See Peters v. Forster, 804 N.E.2d 736 (Ind.2004). Mission Land and GE are mistaken, however, to assume that the mere existence of the Peters decision compels reversal. Instead, we must analyze both the arguments made below and the evidence, taken in the light most favorable to them, to see whether the district court’s conclusion was correct. Whether Firestone owed a duty to Mission Land and GE is a question of law, which we will consider based on the summary judgment record. In light of Peters, we analyze Firestone’s potential liability under traditional theories of negligence. Even under a normal negligence analysis, we find that the district court rightly concluded that Firestone owed no duty to Mission Land and GE.

II

Indiana law, which the parties agree applies, recognizes that “a party may gratuitously or by contractual undertaking to render services, place himself in such a position that the law will impose upon him a duty to perform his undertaking in a manner which will not jeopardize the safety of others, including third persons.” Harper v. Guarantee Auto Stores, 533 N.E.2d 1258, 1262 (Ind.Ct.App.1989). In order to assess an actor’s liability to third parties, the Indiana courts have adopted the Restatement (Second) of Torts § 324A. Baker v. Midland-Ross Corp., 508 N.E.2d 32, 34 (Ind.1987). Under § 324A, Mission Land and GE must demonstrate that Firestone engaged in an undertaking to render services, and either: (1) that the risk of harm to Mission Land and GE increased due to Firestone’s failure to exercise reasonable care; (2) that Firestone undertook to perform a duty owed by NIR to Mission Land and GE; or (3) that the harm suffered by Mission Land and GE was a consequence of their reliance on services rendered by Firestone. Harper, 533 N.E.2d at 1262.

[744]*744Mission Land and GE assert that Firestone had a duty to warn of deficiencies in the roof caused by either an insufficient amount of ballast or from the use of an inferior wood nailer. They theorize that if Firestone had performed an appropriate inspection of the roof back in 1989, it would have found the weaknesses that later resulted in the roofs inability to withstand the thunderstorm and would have either corrected the problem or at least warned the plaintiffs about it. Firestone responds that it merely warranted its own product, the rubber membrane, against leaks and tears, but that the membrane is part of an entire roof system, and the system (as opposed to its component parts) was not included in Firestone’s warranty.

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126 F. App'x 741, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mission-land-co-v-bfs-diversified-products-llc-ca7-2005.